Feed-In Tariff Sets Up Japan Solar For Growth

Like many other countries upping their renewable energy game, Japan is pulling out all the stops to encourage new growth from solar and wind power. After the Fukushima nuclear disaster, Japan has to find other alternative energy solutions to nuclear, and is proposing a new feed-in tariff (FIT) scheme to encourage solar and wind investment. The new policy will go into action in July and could have very positive implications solar development, according to Bloomberg New Energy Finance.

The Japanese government has proposed rates that will make renewable investment in Japan a very attractive opportunity. According to Bloomberg, the proposed FIT rates could bring equity returns as high as 44 percent for solar projects and 51 percent for wind projects. Rates that good will likely bring in a lot of project proposals, but the actual development will depend on Japan’s planning regime, which Bloomberg notes could be conservative.

image via Wikimedia Commons

With that in mind, we could see Japan with a wind and solar capacity of 20 gigawatts (GW) by 2014, over 10 GW of which Bloomberg estimates will be from new solar installations. Based on current costs, such growth would require investments close to $37.5 billion over the next three years. If Japan follows Bloomberg’s projected growth, it could become the third-largest solar market in the world by 2014.

“The country may build enough distributed solar capacity over the next three years to equal the electricity output from almost three nuclear power stations, and do so in a fraction of the development time,” said Milo Sjardin, head of Asia at Bloomberg New Energy Finance. “To enable further renewable deployment beyond that, the country will likely have to liberalise its power sector.”

Angeli Duffin is a Midwest transplant currently living in San Francisco, CA. Kicking off her career doing product design and development with Fair Trade artisans around the world, she then moved on to the editorial side, writing for eBay’s Green Team blog and working as a marketing consultant for social and environmentally minded companies